ACCOUNTING 572:CORPORATE ACCOUNTING AND REPORTING

Spring 2017 SemesterSection 14256D; ACC 303Monday - 630-930 PMProfessor: Harris Smith Office: Leventhal School of Accounting Building ACC 214 Cell Phone: 925-787-9129 E-mail: harrissm@marshall.usc.eduOffice Hours: Monday’s and Wednesday’s between 2:30 and 3:45pm and by appointment

Welcome: I look forward to meeting each of you during our first class and getting to know you during the Spring semester. Can’t Miss Dates: Please note that these are the dates of exams that should not be scheduled for interviews, trips out of town, etc.: March 20 (midterm exam) and May 8 (final exam). Please note these dates as there are no make-ups for exams.

Prerequisite: GSBA 510 or equivalent. Corequisite: none. Restriction: course is not open to students with credits in equivalent subjects.

Marshall Graduate Programs Learning Goals

This course will deal primarily with Learning Goals 1 and 3 (course emphasis: High) and Learning Goals 4, 5 and 6 (course emphasis: Moderate).

Learning goal 1: Graduates will understand types of markets and key business areas and their interaction to effectively manage different types of enterprises

1.1 Students will demonstrate foundational knowledge of core business disciplines, including business analytics and business economics

1.2 Students will understand the interrelationships between functional areas of business so as to develop a general perspective on business management

1.3 Students will apply theories, models, and frameworks to analyze relevant markets (e.g. product, capital, commodity, factor and labor markets)

1.4 Students will show the ability to utilize technologies (e.g., spreadsheets, databases, software) relevant to contemporary business practices

Learning goal 2: Graduates will develop a global business perspective. They will understand how local, regional, and international markets, and economic, social and cultural issues impact business decisions so as to anticipate new opportunities in any marketplace

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2.1 Students will understand how local, regional and global markets interact and are impacted by economic, social and cultural factors.

2.2 Students will understand that stakeholders, stakeholder interests, business environments (legal, regulatory, competitor) and business practices vary across regions of the world

Learning goal 3: Graduates will demonstrate critical thinking skills so as to become future-oriented decision makers, problem solvers and innovators

3.1 Students will understand the concepts of critical thinking, entrepreneurial thinking and creative thinking as drivers of innovative ideas

3.2 Students will critically analyze concepts, theories and processes by stating them in their own words, understanding key components, identifying assumptions, indicating how they are similar to and different from others and translating them to the real world

3.3 Students will be effective at gathering, storing, and using qualitative and quantitative data and at using analytical tools and frameworks to understand and solve business problems

3.4 Students will demonstrate the ability to anticipate, identify and solve business problems. They will be able to identify and assess central problems, identify and evaluate potential solutions, and translate a chosen solution to an implementation plan that considers future contingencies

3.5 Students will demonstrate the ability to be accurate, clear, expansive (thorough, detailed) and fair-minded in their thinking

Learning Goal 4: Graduates will develop people and leadership skills to promote their effectiveness as business managers and leaders.

4.1 Students will recognize, understand, and analyze the motivations and behaviors of stakeholders inside and outside organizations (e.g., teams, departments, consumers, investors, auditors)

4.2 Students will recognize, understand and analyze the roles, responsibilities and behaviors of effective managers and leaders in diverse business contexts e.g., marketing, finance, accounting,

4.3 Students will understand factors that contribute to effective teamwork

Learning goal 5: Graduates will demonstrate ethical reasoning skills, understand social, civic, and professional responsibilities and aspire to add value to society

5.1 Students will understand professional codes of conduct

5.2 Students will recognize ethical challenges in business situations and assess appropriate courses of action

Learning Goal 6: Graduates will be effective communicators to facilitate information flow in organizational, social, and intercultural contexts.

6.1 Students will identify and assess diverse personal and organizational communication goals and audience information needs

6.2 Students will understand individual and group communications patterns and dynamics in organizations and other professional contexts

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6.3 Students will demonstrate an ability to gather and disseminate information and communicate it clearly, logically, and persuasively in professional contexts

Course Goals and Learning Objectives:

This course focuses on problems and issues related to the collection, reporting, and disclosure of financial accounting information.  The objectives and expected learning outcomes of the course include the following:

By the time students finish this course, they should be able to: 

       explain and apply the rules used to prepare and report the financial accounting information observed in corporate annual reports by solving problems and analyzing transactions/Form 10-K data.

       analyze how a given transaction (from simple to complex) affects each financial statement by preparing transaction analysis sheets.

       extract relevant information from Form 10-Ks by solving problems and preparing written reports based on information presented in cases and Form 10-Ks.

      identify and discuss the impact of external financial accounting information on various stakeholders (e.g., financial analysts, company management, auditors) by preparing written and oral presentations based on information presented in cases, Form 10Ks, and articles from the financial press.

      demonstrate an understanding of the usefulness and limitations of external financial accounting information by preparing written and oral presentations based on information presented in cases, Form 10Ks, and articles from the financial press.

      apply ethical principles in analyzing situations and making informed decisions.

Attachment

Day-by-day Class Schedule and Assignments

Grading

Midterm Examination 190 points maximum

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Final Examination 270 points maximumPeer Evaluations 40 points maximumWall Street Journal assignments, collected homework,

case write-ups 80 points maximum Total points possible 580 points maximum

General descriptions on how the components of your grade (exams etc.) are determined are given below. Due dates for assignments, exams, etc. are listed on the attached day-by-day class schedule. No late work will be accepted. There are no make-ups for exams. Please see “Can’t Miss Dates” on page 1 of this syllabus.

Required Course Materials

The text is Intermediate Accounting 16h Edition (by Donald E. Kieso, Jerry J. Weydandt, and Terry D. Warfield; John Wiley & Sons, Inc.).

NOTE: The text in the bookstore is in a loose-leaf version that you assemble yourself and a bound book version of text. If there are no texts in the ACCT 572 slots in the bookstore, please check the ACCT 370 and ACCT 415 and ACCT 470 slots (sometimes this text gets filed there).

Course reading packet available in the bookstore. The packet contains additional readings from the Wall Street Journal etc. and the non-textbook cases that we will cover in class.

General Description of Teams

Team size can range between four to six members, depending on the ultimate class size. I will allow you to choose your own teammates. If you do not have a preference for teammates, I will assign you to a team. Regarding working on team assignments, I expect that team members will talk among themselves. I also expect that members of one team will not discuss the details of their team’s “answer’ with members of another team.

General Description of Final Exam

The final exam will include all material covered in the course. Many of the questions will be problems based on an annual report distributed near the end of the semester. The final

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exam time is listed at the end of the syllabus.

General Description of Peer Evaluation

Near the end of the course, you will complete peer evaluations of the other members of your team.

Blackboard

Please make sure you can access this course in Blackboard to retrieve the course syllabus and other course materials electronically. You should check Blackboard regularly for announcements and new materials. In the event of an emergency, the ability to access Blackboard will be crucial.

General Description of Wall Street Journal and homework assignments

Some homework problems will be assigned to turn in on an individual basis.

As the semester moves along, there are several times that your professor will specify a case or specify a problem in a homework assignment that will be turned in. These cases and problems will be discussed among team members and then discussed in class.

Wall Street Journal assignments: on the dates specified in the attached day-by-day class and assignments schedule, the following assignment is due at the start of class (each team will prepare a written team answer on each of the dates shown). Written portion: To get a good job placement, it is quite important that you be well informed about the business world. With this in mind, your assignment is to turn in a summary (in your own words and writing style) of an article from the Wall Street Journal or a similar outlet (e.g., BusinessWeek, Forbes, etc.). If possible, the issues from which you get your article should fall within approximately the three weeks preceding an assignment due date. The article should concern accounting. The article summary should not exceed one-half page, typed, single-spaced (or equivalently one page double-spaced). Presentation portion: Each team will be assigned one presentation date from the dates specified in the attached day-by-day class and assignments schedule. Your team is to do a five-to-eight minute presentation as follows: first, summarize your accounting-issue article. Second, for your accounting-issue article, discuss in detail with examples the effect of the accounting issues involved on a company’s financial statements. Use a PowerPoint presentation and please adhere to the five-to-eight minute presentation limit.

Some Important University Dates

Jan 9 Spring semester classes beginJan 16 USC Holiday – Martin Luther King Jr.

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Feb 20 USC Holiday – President’s Day holidayMar 12-19 Spring breakApril 28 Last day of classesMay 8 Final ExaminationMay 12 Commencement

Grading PolicyWe adhere to the USC Leventhal School of Accounting and Marshall School of Business grading standards for graduate programs. In general, final course grades at the graduate level in a core course average approximately B+ (3.3), but may vary based on class performance. For elective courses, the class average is usually higher--approximating 3.5.

Class Attendance, Participation and Professionalism:Class attendance and participation are crucial to your learning. If you will be absent from class, please send me an email prior to the start of class, indicating your absence. Lack of notification will negatively impact the portion of your grade determined by professionalism. Since we only have 14 class sessions, more than one absence will generally impact your score as it relates to attendance.

Participation by all students in class discussions and in-class group exercises is expected and will enhance your knowledge of the course content. Come to class with questions, especially if any of the material is unclear to you. Participation is not just responding to questions posed, it includes asking questions as well.

As a courtesy to everyone, during class please turn off mobile phones and use computers only to access materials relevant to this class. Use of technology for other reasons during class, including texting, shopping, checking on material related to other classes, playing games, etc., will negatively impact your points for professionalism.

Re-Grading:Any requests for re-grading must be submitted in writing or through email. Requests will be accepted up to one week after the quiz/assignment was returned and should clearly state why you think more points should have been earned on that portion of the quiz/assignment.

Withdrawal Policy:As noted in the following Course Schedule, the last date to withdraw from class without a “W” is February 24, 2017 and the last date to withdraw and receive a “W” is April 7,

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2017. Please note the above dates. Lack of awareness of these dates is not sufficient reason to grant an exception to this policy.

Academic Integrity:Students enrolled in any class offered by the Leventhal School of Accounting are expected to uphold and adhere to the standards of academic integrity established by the Leventhal School of Accounting Student Honor Code.  All work you submit and the results of any exam must reflect your own work. Plagiarism in any form will not be tolerated. Students are responsible for obtaining, reading, and understanding the Honor Code System handbook.  Students who are found to have violated the Code will be subject to disciplinary action as described in the handbook.  For more specific information, please refer to the Student Honor Code System handbook, available in class or from the receptionist in ACC 101.

Plagiarism – presenting someone else’s ideas as your own, either verbatim or recast in your own words – is a serious academic offense with serious consequences. Please familiarize yourself with the discussion of plagiarism in SCampus in Section 11,Behavior Violating University Standards https://scampus.usc.edu/1100-behavior-violating-university-standards-and-appropriate-sanctions/. Other forms of academic dishonesty are equally unacceptable. See additional information in SCampus and university policies on scientific misconduct, http://policy.usc.edu/scientific-misconduct/.

Any student found to be in violation of the Accounting Student Honor Code will receive a score of zero for the applicable assignment/exam. There will not be an opportunity to submit other work to replace these lost points.

Conduct:Discrimination, sexual assault, and harassment are not tolerated by the university. You are encouraged to report any incidents to the Office of Equity and Diversity http://equity.usc.edu/or to the Department of Public Safety http://capsnet.usc.edu/department/department-public-safety/online-forms/contact-us. This is important for the safety of the whole USC community. Another member of the university community – such as a friend, classmate, advisor, or faculty member – can help initiate the report, or can initiate the report on behalf of another person. The Center for Women and Men  http://www.usc.edu/student-affairs/cwm/  provides 24/7 confidential support, and the sexual assault resource center webpage sarc@usc.edu describes reporting options and other resources.

Support Systems:A number of USC’s schools provide support for students who need help with scholarly writing. Check with your advisor or program staff to find out more. Students whose primary language is not English should check with the American Language Institute http://dornsife.usc.edu/ali, which sponsors courses and workshops specifically for international graduate students.

Class Notes Policy:

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Notes or recordings made by students on a university class or lecture may only be made for purposes of individual or group study, or for other non-commercial purposes that reasonably arise from the student’s membership in the class or attendance at the university. This restriction also applies to any information distributed, disseminated or in any way displayed for use in relationship to the class, whether obtained in class, via email or otherwise on the Internet, or via any other medium. Actions in violation of this policy constitute a violation of the Student Conduct Code, and may subject an individual or entity to university discipline and/or legal proceedings. No student may record any lecture, class discussion or meeting with the professor(s) without the professor’s prior express written permission. The word “record” or the act of recording includes, but is not limited to, any and all means by which sound or visual images can be stored, duplicated or retransmitted whether by an electro-mechanical, analog, digital, wire, electronic or other device or any other means of signal encoding. The professors reserve all rights, including copyright, to lectures, course syllabi and related materials, including summaries, PowerPoint slides, prior exams, answer keys, and all supplementary course materials available to the students enrolled in class whether or not posted on Blackboard or otherwise. They may not be reproduced, distributed, copies, or disseminated in any media or in any form, including but not limited to all course note-sharing websites. Exceptions are made for students who have made prior arrangements with DSP and with the professor(s). The Office of Disability Services and Programs http://sait.usc.edu/academicsupport/centerprograms/dsp/home_index.html provides certification for students with disabilities and helps arrange the relevant accommodations.

Any student requesting academic accommodations based on a disability is required to register with Disability Services and Programs (DSP) each semester. A letter of verification for approved accommodations can be obtained from DSP. Please be sure the letter is delivered to your professor as early in the semester as possible. DSP is located in GFS (Grace Ford Salvatori) 120 and is open 8:30 a.m.-5:00 p.m., Monday through Friday. The phone number for DSP is 213-740-0776. Email: ability@usc.edu.

Emergency Preparedness/Course Continuity in a Crisis: If an officially declared emergency makes travel to campus infeasible, USC Emergency Information http://emergency.usc.edu/ will provide safety and other updates, including ways in which instruction will be continued by means of Blackboard, teleconferencing, and other technology.

Emergency Information Line (213) 740-9233USC Emergencies (213) 740-4321Information (tune to KUSC Radio at 91.5 FM)USC Info Line (213) 740-2311USC Public Safety – Non Emergencies (213) 740-6000

Add/Drop Process

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In compliance with USC and Marshall’s policies classes are open enrollment (R-clearance) through the first week of class. All classes are closed (switched to D-clearance) at the end of the first week. This policy minimizes the complexity of the registration process for students by standardizing across classes.  I can drop you from my class if you don’t attend the first two sessions. Please note: If you decide to drop, or if you choose not to attend the first two sessions and are dropped, you risk being not being able to add to another section this semester, since they might reach capacity. You can only add a class after the first week of classes if you receive approval from the instructor.

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Session Topic Text Readings

Homework (at the end of chapters are Exercises (marked E), Problems (marked P), and Cases (marked CA). DO NOT TURN IN ASSIGNED E, P, CA - WORK ON THEM TO BE PREPARED FOR CLASS AND EXAMS

Jan 9 Accounting Rules & Enforcement; Sarbanes-Oxley; Codification

Accounting Conventions

Convergence of GAAP and IFRS

Footnote Disclosures

pp. 2-22

pp. 36-60

pp. 29-35

pp. 1461-1468

Accounting (Bookkeeping) Cycle (review)

Accrual vs. Cash Basis of Accounting

pp. 78-115 pp. 115-118

Handout problem (to be turned in Jan 23)

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Jan 23 Revenue and Expense Recognition; Multiple Deliverables (current rules)Revenue Recognition Rules (new)

Expenses: Matching Principle

pp. 978-1012

CA 18-1; 18-2; Prepare to discuss Reading Packet article “Apple Gets A Bruise…”

Warranty Expense Bad Debt Expense

pp. 676-678pp. 329-338

E 13-11P 7-4; Reading Packet: HealthSouth

****** ******************************** **************************** ****************************** Jan 30 Balance Sheet: Elements & Interpretation

Contingencies IFRS Differences New Lease Accounting Rules

Enron Case (off balance sheet financing)

pp. 200-216pp. 673-676pp. 258-264; pp. 710-717 (“Contingencies”)Grant Thornton New Developments Summary on Leasespp. 739-741

P 13-11Reading Packet: Accounting for Leases

Prepare the “Enron Collapse” Case

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Session Topic Readings Homework

Feb 6 Income Statement Elements Irregular Items: Special, Extraordinary, Discontinued Operations

Accounting Changes, Errors

Rules for R&D

pp. 152-161pp. 162-167

pp. 170-179; pp. 1266-1298

pp. 628-634

E 4-1

Wall Street Journal Assignment due****** ***************************** ***************************** *******************Feb 13 Analyzing Errors

IFRS Differences

Quarterly Reporting

Pro-forma numbers

pp. 1284-1298; pp. 416-418 (Inventory Errors)

pp. 195-197

pp. 1417-1423

pp. 152-153; 861-862

E 22-18

Earnings and Reporting ManagementExpense vs. Capitalize

pp. 155-156; pp. 1288-1290; pp. 1432-1441Prepare “Sierra On-Line” Case

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Session

Feb 27

Topic

Overview: Invest in Other Firm’s EquityDetailed Rules on 0%-20% Equity StakeComprehensive IncomeStatement of Comprehensive Income

20%-50% Equity Stake: Equity MethodStatement of Stockholder Equity

Statement of Cash Flows: How to Use

Readings

pp. 908-912pp. 173-177

pp. 912-914

In-class handout: Accounting Coach

Homework

E 17-15; E 17-17; P 17-8

Wall Street Journal Assignment due******* ******************************** **************************** *****************************March 6 Statement of Cash Flows: Basics

Statement of Cash Flows: Beyond Basics

pp. 1330-1369; pp. 216-224 E 23-11; E 23-6

Some fine points Effect of Equity Method Managing CFO IFRS Differences

Interview Question

pp. 1396-1399

Handout: transaction analysis sheet

P 23-2

Reading Packet: Fuzzy Numbers

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March 20

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MIDTERM

******************************** ***************************** ******************************March 27

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IFRS Convergence

Fair Value Accounting

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pp. 52-54; pp. 226-227; pp. 903-908; pp. 941-944; pp. 1408*****************************

Prepare “IFRS in China” Case

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Session Topic Readings Homework

April 3

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April 10

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Accounting for Stock-Based Compensation

Accounting for Inventory

********************************Earnings per Share

PP&E: Impairments (held for use only)PP&E: IFRS RevaluationTax Code Accounting for Depreciation

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pp. 843-851; pp. 268

pp. 386-389; pp. 398-415

****************************pp. 851-863

pp. 565-568pp. 602-606pp. 576-579

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E 16-11; E 16-13

CA 8-11Wall Street Journal Assignment due****************************E 16-23; E 16-26

P 11-9

April 17 Accounting for Income Taxes Permanent and Temporary Differences Deferred Taxes: Examples Unequal Future Tax Rates Equity Method Effects IFRS

pp. 1064-1067pp. 1055-1063pp. 1067-1068In-class handout: pwc ASC 740pp. 1114-1115

P 19-4

Wall Street Journal Assignment Due

NOLs and Valuation Allowance Uncertain Tax Positions Financial Statement Presentation Case on Taxes

pp. 1069-1083pp. 1081pp. 1076-1080pp. 1083-1090

E 19-23

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******May 8

Accounting for Pensions

********************************FINAL EXAM: 7 PM – 9 PM

pp. 1116-1138 (omit work sheets)

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E 20-2, E 20-4

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